OFFICE DEPOT SHAREHOLDERS MOVE TO SPLIT LEADERSHIP ROLES

[Anonymous]

http://www.sun-sentinel.com/business/sfl-office-depot-stockholders-meeting-042209,0,3337910.story
Office Depot shareholders move to split leadership roles
Office Depot shareholders want separate chairman and chief executive
It’s
a conflict for the same person operating the company to oversee the
board of directors, said Rich Ferlauto, director of corporate
governance for the American Federation of State, County and Municipal
Employees, to a handful of shareholders at the annual meeting at the
Boca Raton Marriott.Office Depot’s shareholders on Wednesday passed an
investor proposal to separate the roles of company chairman and chief
executive officer, a move many large corporations have made in recent
years.The nonbinding measure passed with 54 percent of shareholders in
favor. Now it will be reviewed by independent directors, Steve Odland,
the chairman and chief executive who survived a separate stockholders’
challenge in 2008, said at the annual shareholders’ meeting.The Boca
Raton-based office supply retailer had recommended that shareholders
vote against the proposal, saying lead independent director Neil
Austrian fills the role an independent chairman would.

It’s a
conflict for the same person operating the company to oversee the board
of directors, said Rich Ferlauto, director of corporate governance for
the American Federation of State, County and Municipal Employees, to a
handful of shareholders at the annual meeting at the Boca Raton
Marriott.Odland told shareholders he is positioning Office Depot for
recovery and international growth.”We will focus on what we can
control,” Odland said, adding that the retailer has closed 112 of
nearly 1,300 North American stores and six distribution centers. More
warehouses will be closed in coming months and years as the company
consolidates distribution, he said.

Meanwhile, Office Depot is
trying to expand its international business. It’s already the largest
office supply retailer in China and India.Office Depot has been a
bellwether company for the recession, he said, because its prime
customer is the small business, which has cut back on purchases. The
spillover effects from the housing crunch in Florida and California,
states that make up 30 percent of Office Depot’s retail sales, also
have driven down store sales, Odland said.The company’s stock, which
hit a 52-week low of 59 cents in March, has bumped up in recent weeks,
closing Wednesday on the New York Stock Exchange at $2.12, up 13 cents.

For
2008, Office Depot posted a loss of $1.48 billion, or $5.42 per share,
compared with a profit of $396 million, or $1.43 per share a year
earlier. The annual loss was on sales of $14.5 billion, down 7 percent
from 2007. First-quarter earnings are scheduled to be released
Tuesday.Odland said larger rival Staples has been less affected by the
weak economy because it has larger operations in Canada and the
Northeast.Aside from its economic challenges, Office Depot has faced
investigations related to overcharging for office supplies by the U.S.
Justice Department, Florida public agencies and several states. Office
Depot said it is cooperating with all the investigations.

In an
interview Wednesday after the annual meeting, Odland said most of the
pricing disputes were politically motivated and Office Depot has saved
public agencies millions of dollars on office supplies compared with
smaller supply firms.According to the company’s proxy statement,
Odland’s 2008 total compensation was $9.36 million. Of that, $1 million
is his annual salary. Odland said he did not get a performance bonus
for two years and stock options that are part of last year’s
compensation last year are currently worthless.

Separately, the
New Mexico Educational Retirement Fund on Monday filed an amended
lawsuit in U.S. District Court for the Southern District of Florida
accusing Office Depot of financial fraud.The lawsuit uses the company’s
restated earnings in part of 2006 and early 2007 to allege that Office
Depot misreported vendor rebates to artificially inflate earnings
during that period.Brian Levine, an Office Depot spokesman, said the
suit is a refiling of one dismissed by the court.

[Author]

April 28, 2009 at 12:20 PM